Page 8 - RusRPTApr23

from a year earlier. The federal budget deficit has skyrocketed, reaching nearly 4% of GDP for the 12-month period ending in February. Spending growth in the consolidated budget (federal, regional and municipal budgets plus state social funds) remained rapid last year, with spending in the fourth quarter up by nearly 20% Y/y. The consolidated budget deficit in 2022 was 1.4% of GDP. The federal budget deficit was 2.3% of GDP.
Exceptionally low unemployment rate
“As a consequence of war and mobilisation, Russia faces a labour shortage that can already be seen in wage growth. The national unemployment rate fell to just 3.5 % in February, its lowest level of the post-Soviet era,” BOFIT said. “In the most industrialised regions in the Central Federal District of Russia, as well as Moscow and St. Petersburg, the unemployment rate is currently below 3 %. While there are still large fluctuations across regions, the sole regional unemployment rate in excess of 10 % was found in regions in the North Caucasus.”
Despite recession, growth in nominal wages has remained brisk. Moreover, real wages should start rising this year as inflation ebbs. In January, nominal wages were up by 12.4% Y/y, and the average real wage up by 0.6%. The rise in the average wage was most pronounced in government administration and the currently thriving branches of industry such as metal refining and machine-building.
An important driver of Russia's low unemployment rate is its shrinking working-age population. The fastest decline has been seen in the past decade in the cohort of Russians aged 20–40 years.
The labour supply is also influenced by changing migration patterns. In recent decades, the Russian labour market experienced a fairly stable flow of fresh workers from Central Asia and Caucasus regions.
Russia's migration statistics only tell part of the story. In particular, Russian citizens moving abroad do not always officially register as emigrees.
GDP growth still low
Russia's gross domestic product (GDP) decrease slowed to 3.1% on the year in February from 3.2% in January, the Economic Development Ministry said on March 30. The ministry said that the economy was supported by the growth of construction volumes, industrial output and cargo transportation, excluding via pipelines.
One of the most striking results has been a 53% growth in light vehicle production in February y/y, although most of this gain is a low base effect after car production came to a virtual halt after the invasion of Ukraine a year ago.
8 RUSSIA Country Report Russia April 2023 www.intellinews.com